Making Finance & Accounting Hires? Here’s When to Turn to Executive Search
Not unlike the differences between finance and accounting, there are different staffing models – and terms and conditions – depending on the role and responsibilities, the level of the open position, and, in some cases, the number of open positions there are.
For high volume staffing, a managed service provider (MSP) or recruitment process outsourcing (RPO) partner might make the most sense. These are typically arrangements reserved for enterprise-wide hiring in the thousands. These employers are usually in need of ongoing recruiting support for multiple locations – nationally and internationally – and contracts are in place for 3-5-year terms.
Then, there is contingency-based staffing – one of the most common forms of staffing – which can be used to describe not only the contingent nature of the type of worker typically being recruited but also the contingent nature of the agreement between the staffing firm and the employer looking to make the hire. Meaning, a staffing firm’s compensation is contingent on their ability to find people for open positions; they are not compensated if they do not find people employers are willing to hire. The majority of staffing is contingency-based and focused on sourcing temporary and contract employees.
In fact, according to data collected by the American Staffing Association:
- Approximately 55 percent of staffing companies and 74 percent of their offices are in the temporary and contract staffing sector of the industry. (ASA: Staffing Industry Statistics)
- During all of 2018, staffing companies hired a total of 16.8 million temporary and contract employees. (ASA: Staffing Employment Sets Record High in 2018)
But for certain positions, this high-volume, contingent model simply does not work. And that’s when permanent placement and executive search services come in.
When to Turn from Contingent Staffing to Executive Search
In a recent article on how to retain finance and accounting talent we covered key employment trends, including the national unemployment rate and the unemployment rate for finance professionals (3.6 percent vs. 1.6 percent, respectively) as well as the cost of employee turnover, but what we did not include is how these numbers are impacting the way in which searches are being conducted today.
The 50-year-low in unemployment means the majority of people who are willing and able to work are currently working. To entice people from full-time, permanent positions to temporary, or even contract-to-hire, positions can prove to be quite difficult. But, with workers quitting their jobs in record numbers, it’s easy to understand why employers may be hesitant to make permanent hires and pay permanent placement fees. A contingent- or contract-based working relationship means employers are not responsible for paying lump sum amounts (based on a percentage of an employee’s annual salary), but rather pay smaller fees over time and only while the employee continues to temp for them.
To combat these competing trends, more often than not, employers are willing to consider both contract and permanent placement candidate options, leaving the ultimate decision up to who is available and interested at the time an opening becomes available – a wise approach given the tight talent market we’re currently in.
And yet, other positions may still require an entirely different approach altogether.
Executive search is a specialized recruitment service designed to identify top talent for senior, executive, and other high-level, specialty positions. Executive search is good for those positions that benefit from competitor sourcing, where candidates may not be immediately available, or for positions where qualified, long-term candidate options are not immediately identifiable.
Executive search recruiters, like those at The Intersect Group, call on personal contacts and have well-developed, long-term relationships with talent in a specific vertical, like finance and accounting for instance. They provide market and compensation intelligence back to the employer, and they’re usually heavily involved in the logistics of the position, including drafting the job description and determining total compensation and other employment package details, in order to be able to successfully sell and compel candidates to the opportunity.
Executive searches can be conducted on a contingent or a retained basis. Contingent executive searches mean payment for services is made only after the successful completion of the search, whereas compensation for retained executive searches are made, typically, in two installments – one at the start of the search, where the firm is paid for shepherding the process, and the second payment is made once a candidate has been offered and accepts the position. Executive searches also include a longer-term retention clause, alleviating employers of some of the costs associated with making the wrong hire. This means if the candidate who is selected leaves before a designated amount of time (usually 12 months or more) the firm will re-source candidates free of any additional charges or at a discounted rate.
Companies that decide to go the executive search route usually do so because they do not have the internal resources, network, or, in some cases, the skills needed to recruit and evaluate high-level, specialized candidates themselves. Utilizing an executive search partner not only opens up the market by digging into important nooks and crannies in the market, including competitors, but it also means the process will be managed with a high-level of detail and sophistication – a level most executive-level talent today all but need in order to be enticed to consider, let alone take, new career opportunities.
If you’re in need of executive-level finance and accounting talent, please get in touch with our team of experts. We engage in direct hire and executive searches on a contingency and retained basis to fulfill the strategic hiring needs of our clients. In Atlanta, we have the largest dedicated executive search practice.